Wednesday, July 4, 2007

Going Long - RRI - Darvas Box Play

We found this stock in March and the chart looked good. To be honest, I can't remember how we tweaked the filter, but we found it by tweaking this filter on the first GOING LONG post with good volume and price staying above the MA(20). I think we liked this one since it had huge volume and was up around 50% in 6 months.

Anyway, we decided to buy it and play it with a modified Darvas box strategy. Meaning average up if the price continues to make new highs. (Apologies to Nicholas Darvas for my oversimplification, it's been a long time since I read his book.)

We bought 100 shares on 03.19 at $18.85. The prior close was $18.84 so we set the next box top at 10% over that, $20.72. When it closed above that on 03.22, we bought another 100 shares at the open at 20.12 (just luck on that entry due to a gap down that morning), and so on. We are now long 400 shares. Closed over the box top at $27.95 yesterday, so will buy another 100 at the open tomorrow.

Mental stop of 8-10% on the average share price. Up 28.4% in 3 1/2 months on the average cost of $21.77. Nice.

This blog exists so that Muddy doesn't have to repeatedly answer the same questions from new readers and chat room members.

Muddy outlines how he screens, selects, and plays stocks. You won't find daily posts on the market. We don't care if the markets are green or red, nor do we post general market commentary. As Loki said in the chat room, "No matter the shade, cash to be made".

Disclaimer

Content on this site is not appropriate for the purpose of making a decision to carry out a transaction or trade. Nor does it provide any form of advice (investment, tax, legal) amounting to investment advice. Under no circumstances should any person at this site make trading decisions based solely on the information discussed herein.

****DISCLAIMER****

Content on this site is not appropriate for the purpose of making a decision to carry out a transaction or trade. Nor does it provide any form of advice (investment, tax, legal) amounting to investment advice. Under no circumstances should any person at this site make trading decisions based solely on the information discussed herein.